The Chinese government has reportedly taken stakes in ByteDance and Weibo as its hold on tech tightens

• The Chinese government has acquired a stake in TikTok parent ByteDance and China's Twitter equivalent Weibo as its willingness to assert control over China's tech giants grows.
• TikTok itself does not appear to be directly implicated, according to a source who spoke to Reuters.
• The news comes as a flurry of regulatory actions against Chinese tech companies has tanked US-listed shares.

The Chinese government has acquired a stake in TikTok parent ByteDance and Twitter-for-China Weibo as its willingness to assert control over China's tech giants grows, according to several reports.

While TikTok itself does not appear to be directly implicated, according to a source who spoke to Reuters, ByteDance, the world's most valuable private tech company, became a flashpoint under the Trump administration and the government's ownership stake could raise new concerns.

On Tuesday afternoon, Sen. Marco Rubio, a noted China hawk, called on the Biden administration to ban TikTok in America.

"The Biden administration can no longer pretend that TikTok is not beholden to the Chinese Communist Party," Rubio said in a statement. "Beijing's aggressiveness makes clear that the regime sees TikTok as an extension of the party-state, and the U.S. needs to treat it that way."

The Chinese government has obtained a 1% stake in as well as a seat on ByteDance's three-person corporate board via a state-owned company, as its crackdown on tech companies over alleged data privacy violations grows. The ownership stake appears to have been taken in or before April 2021. The Information first reported the news.

The state has also taken a 1% stake in Weibo, China's equivalent of Twitter, according to SEC filings reviewed by Reuters. The government-controlled fund invested in a Weibo division called Beijing Weimeng Technology in 2020 and retains the ability to appoint a director to a three-person corporate board.

News of the two ownership stakes comes as a flurry of regulatory actions against Chinese tech companies has tanked share prices for some of the world's biggest firms. The latest salvo came on Tuesday when China's internet regulator published draft rules for internet companies that would restrict certain data practices.

As international investors reckon with the shifting environment in China, BlackRock on Monday advised boosting exposure to China, saying that it should no longer be thought of as an emerging market. It advised portfolio allocations as high as 10% to Chinese stocks, versus around 4% for many global baskets.

In July, as the tech crackdown was accelerating, Chinese regulators held a call with large asset managers including BlackRock, reassuring them that China was still committed to open capital markets.